Setting up a business involves a variety of activities and requirements, including intensive planning, dealing with government authorities and obtaining startup funding. Making a checklist of your business startup requirements can act as a guide to setting up a business, ensuring that your company is set up properly and legally.

Significance

Setting up a business from the ground up can be a dream come true for the right kind of person, providing personal fulfillment and a sense of accomplishment. Building a business requires intense commitment and hard work at all hours of the day. Setting up a business properly is crucial to early stage success. Creating a thorough business plan can help you to think through and plan for all of the requirements, from financing to legal issues to operational logistics.

Purpose

Entrepreneurs start businesses for a variety of reasons. Many build their companies to achieve financial independence, or to establish a reasonable retirement fund. Others start a business to provide for their family, or to serve an unmet need in the community. Setting up a business can also benefit the local economy, boosting employment rates and standard-of-living statistics.

Legal Considerations

A number of legal issues need to be considered when setting up a business. All businesses must be registered with state authorities. Sole proprietorships, partnerships and limited liability companies need not go any further than this. Corporations, on the other hand, must register with federal authorities, including the Securities and Exchange Commission. State laws on licensing requirements vary. Certain businesses, such as liquor stores, need a special license in any state; others, such as commercial real estate brokerages, may need a special license depending on state law. Zoning permits and other local permits vary by county and town as well. Contact your secretary of state to inquire about state law issues; contact your county clerk for local issues.

Financing

All businesses need some form of financing to keep operations going. Create a comprehensive financial plan while setting up your business. Determine how much money you need to cover your initial operations, and decide which funding sources to pursue. Startup funding can be obtained from personal savings, personal loans, bank loans, investor financing or business grants. Future operations can be financed by profits in addition to the startup financing options.

Business Model

Businesses frequently fail for lack of a solid business model. This simple concept can greatly influence your company's chances of long-term survival. A business model is a plan for exactly how your business will earn a profit. Always know exactly where your profit is coming from, especially in the early stages, when expenses can be high. As an example, a video game company knows that its products require a significant upfront investment, but that direct unit costs are a very small fraction of the price paid by retailers. Once a video game company sells enough of a certain product to cover its upfront costs, it begins to realize an very sizable profit margin for all additional units sold.

About the Author

David Ingram has written for multiple publications since 2009, including "The Houston Chronicle" and online at Business.com. As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. He has earned a Bachelor of Arts in management from Walsh University.